China's retail sales, industrial output and fixed-asset investment all slowed in July, while urban unemployment climbed to 5.2%. The broadening weakness follows the economy's slowest quarterly growth since late 2022 and adds pressure on Beijing to expand policy support.
China's retail sales rose 0.6% year-on-year in July, missing the 1.5% growth economists had forecast in a Reuters poll, while fixed-asset investment and industrial output both slowed further. The data, released Monday, point to a broadening slowdown that is pressuring Beijing to expand policy support in the second half of the year.
Industrial output rose 4.5% in July, undershooting the estimated 4.8% increase and down from 5.3% growth in June. The urban unemployment rate climbed to 5.2% in July from 5% in June. The bureau also released the data at 3 p.m. instead of its usual 10 a.m. slot.
Investment slump deepens
Urban fixed-asset investment, which includes real estate and infrastructure, contracted 6.7% in the January-to-July period from a year earlier, worse than the estimated 6% decline and steeper than the 5.7% drop recorded in the first half. Real estate investment fell 19.2% over the same seven months, while infrastructure investment dropped 3.6% and manufacturing investment declined 1.7%.
Higher costs tied to disruptions in global energy and shipping markets also weighed on producers, Investing.com reported. New bank loans issued in July recorded their largest monthly decline on record, according to Barclays's calculations of official data released by the People's Bank of China; household loans, including mortgages, shrank again after a brief recovery in June.
Weak demand offsets export strength
The slowdown follows China's slowest GDP growth since late 2022, when the economy expanded 4.3% in the second quarter. First-half growth of 4.7% keeps the country on track to meet Beijing's 4.5%-to-5% target range for the year.
Exports remained a bright spot, rising 23.9% in July from a year earlier and beating estimates, though the pace eased from a 27% surge in June that was the fastest since 2021. China's trade surplus reached $687.4 billion in the January-to-July period, keeping the country on pace for another trillion-dollar-plus surplus this year.
Factory output was likely hampered by three typhoons that made landfall last month, Reuters reported, forcing the relocation of millions of people across China's manufacturing hubs. Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said the data point to "further downside risks" that call for a more effective policy response.
Sources: CNBC, Investing.com, Investing.com
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